[EDITORIALS]Stay course on economy

Observers increasingly say that the economy has hit bottom and is rising from its nadir. Wealthy consumers are beginning to loosen their purse strings and indexes in the United States and Europe show the sign of economic recovery one after another.

Anticipation of economic recovery is the most apparent in the stock markets. Stock markets worldwide - the leading indicator preceding the business climate - are going up all together. Upturns in the U.S. stock markets, which exert strong influence on Korea's stock markets, are particularly conspicuous. As of Wednesday in the U.S., the Dow Jones Industrial Average of the New York Stock Exchange regained the 10,000-point level after three months. The Nasdaq Composite also recovered the 2,000-point level after four months of decline. Such upward trends are based on the anticipation of an early ending of the war in Afghanistan as well as the signs of recovery demonstrated by the economic indicators of production and consumption. The strong markets send a positive signal to the world which has eyed the United States.

Korea's stock markets are far more active than those in the United States. This week, stock markets here hit new records for the year; the Korea Composite Stock Price Index even climbed over the 700 mark at one point Thursday. Comparing to the trough in early October, the index grew more than 40 percent over the past two months. It may be true that Korea's markets have been heated up and cooled down fast, contributing to the upsurge. Still, optimism that the nation's economy has passed the valley is behind the bull markets along with growing foreign investments.

Yet, cautions still remain despite the spreading optimism surrounding the stock markets. Most of all, indexes directly related to the quality improvement of Korea's economy such as exports and investments are moving separately from the stock prices. Facility investments by companies are still contracting in double digits. Although contraction in exports dwindled in November, exports still declined 16 percent. Despite the general upward tendency in the stock market, stock prices are fluctuating widely, destabilizing the markets. That is why the investors and the government should not relax their attention.

It is promising that positive signs of economic recovery are seen both inside and outside the country. Due to the sluggish markets, even stock investment products with tax exemptions were introduced in Korea. The recently revitalized stock markets can provide a significant turning point for our economy. The bullish stock markets, after the long slump, should recover investments by companies and enhance competitiveness instead of being mere anticipation.

At this point, we pay our attention on the views proposed at the meeting of Jin Nyum, deputy prime minister, and heads of private economic research institutes held on Wednesday. At the meeting, the heads of think tanks emphasized the importance of consistency in government policies on the economy. They advised that the government should not flip-flop only because businesses show a small sign of recovery or only because general and presidential elections are coming next year. As they have advised, government spending should lead economic recovery until the first half next year. In addition, Seoul should determine firmly that it will carry out consistent policies such as maintaining low interest rates, easing control on large companies and shutting down hopeless businesses and financial firms to support the market.